WASHINGTON – Farmers now have more time to repay Marketing Assistance Loans (MAL) as part of the US Department of Agriculture’s implementation of the 2020 Aid Act, the rescue and economic security of coronaviruses. Loans mature at 12 months instead of nine, and this flexibility is available for most products.
“Spring is the season when most producers are most in need of capital, and many may have or are considering loaning products. Extending the maturity of product loans gives farmers more time to market their products and pay off their loans later, “said US Secretary of Agriculture Sonny Perdue. “We are extremely pleased that the USDA can offer these marketing flexibilities at this critical time for the agricultural industry and the nation.”
As of today, producers of eligible products now have up to 12 months to repay their product loans. The maturity extension applies to non-recourse loans for the 2018, 2019 and 2020 crop years. Eligible open loans must be in good standing with a maturity date of March 31, 2020, or later or a new crop year (2019 or 2020) requested before September 30. , 2020. All new loans applied for by September 30, 2020 will have a maturity of 12 months from the date of approval.
The extension of the term of active and active loans will automatically be extended for another three months. Loans maturing on March 31 have already been automatically extended by the USDA Farm Service Agency. Producers who prefer a nine-month loan will need to contact their local FSA county office. Loans requested after September 30, 2020 will have a term of nine months.
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Eligible products include barley, chickpeas (small and large), corn, cotton (basic and extra long), dry peas, grain sorghum, honey, lentils, mohair, l oats, peanuts, rice (long and medium grain), soybeans, mowed skins, wheat, wool (graded and not traded); and other oilseeds, including canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sunflower seeds, and sesame seeds. Seed cotton and sugar are not eligible.
Lending commodities provides producers with interim financing to meet cash flow needs without having to sell their products when market prices are low, and allows producers to store production for more orderly marketing of products. year round.
These loans are considered non-recourse because the proceeds are pledged as collateral for the loan, and producers have the option of giving the collateral pledged to the Commodity Credit Corporation for repayment of the outstanding loan at maturity.
REIMBURSEMENT OF EVENT
Under the new maturity provisions, producers can still repay the loan as they would have done before the extension:
reimburse the MAL on or before the due date;
at maturity by delivering or confiscating the product from the CCC as a loan repayment; or
after the due date and before the CCC acquires the product stored on the farm by reimbursing the MAL principle and the outstanding interest.
MARKETING LOAD GAINS
A marketing loan gain occurs when an MAL is repaid at an amount less than the principal of the loan. If market gain is applicable during the now extended loan period, producers can receive a gain on the repayment made before the loan matures.
For more information on MAL, contact the nearest FSA county office. The USDA service centers, including the FSA county offices, are open to businesses only by telephone appointment, and field work will continue with appropriate social distancing. Although program delivery staff will continue to come to the office, they will work with producers over the phone and use online tools where possible. All visitors to the service center wishing to do business with the FSA, the conservation department of natural resources or any other agency of the service center must call their service center to make an appointment by phone. More information can be found at farmers.gov/coronavirus.